A recent industry study found that more than one third of Australia's property loan borrowers have no idea about the loan process and furthermore, only 24.7 per cent of those looking to buy property were considered to be well-informed about the home loan process.

Before beginning your property research and planning, let alone putting in an offer to buy a property, you must first work out how much you can afford to spend. This is quite different from ‘how much you can borrow’ which we’ve covered over the last two months.

Once you’ve worked out your cost of living and decided on a realistic allocation for weekly out-of-pocket expenses, you should allow yourself a buffer to cover life’s little surprises such as interest rate rises and unplanned expenses.

Buying property is a big decision and often a stressful one. I see many couples who are considering a property purchase but have vastly different ideas about what they want and what they think they can afford. If you are considering a property purchase with someone else (whether partner, friend or family member) make sure each person has had an opportunity to clarify what they are looking for and what they think is affordable. Only then should you look at how much you can borrow.

Work with someone who can take you through each step of the home loan process and explain what happens next and most importantly how long it will take.

Did you know: the recent tax changes mean the cost of investment properties has gone up for many high income earnings? Investors Choice now has access to proprietary property investment software to assist you in determining your weekly out-of-pocket expenses, taking into account tax deductions and your actual expenses. If you would like to discuss further give us a call on 1800 464 810.

Don’t be one of the 18.8 per cent who purchase a property before organising a loan. Preapproval takes to worry out of reneging on a signed contract and in the worst case losing your deposit.

For a simple ‘7 Step Guide to the Home Loan Process’ click on this link to the Investors Choice website

Remember as a Newsletter Member you also have access to the InvestKit containing easy to use spreadsheets for researching and locating the right property. Copy this link into your internet address section Click on the link below.

Once again I have been hearing laments from clients who struggle to control their credit card debt. Previously in this newsletter we have discussed strategies for managing the plastic monster, but last week I heard of a technique that is – quite frankly – unique.

A shop assistant told me of a female customer who having decided to buy an outfit, asked the store to hold it for 3 days whilst she “thawed her credit card”. To curb her impulsive spending the woman had sealed her credit card in a plastic bag, and then put it in a Tupperware container filled with water and placed it in the freezer. When she saw something she wanted to buy (which wasn’t in her planned budget) she then had to wait at least 3 days for the credit card to thaw (yes, winters are very cold in Melbourne). A word of advice: if you try this at home, don’t put it in the microwave.

If you have an interesting way of managing debt or controlling spending we’d love to hear about it. Send an email to askus@investorschoice.com.au so we can share it with others.

Just like Christmas, tax time seems to come around so quickly. Its now time to find all those loose receipts you’ve stuffed in a shoebox (or if you’re organised an expanding file) and track down the depreciation schedule to make sure you claim all that you are entitled to.

Over the last 5 years we have been quietly perfecting a few tools to assist in tracking down those receipts and reducing the work for my accountant. Its not that I’m altruistic, I’m just keenly aware that he charges by the hour so reducing the time he spends on my return also reduces my costs, and at the end of the day I want to understand where my money is going.

I’ve decided it would be unfair of me not to share all this hard work with you and so this month I have included the Investment Property Tax tracker in the “Members Only” InvestKit.

This spreadsheet has been developed based on the criteria and format required by the ATO, so it will save you time and money. Obviously we are not accountants and this is for personal use but I am sure you can use it as a basis for your own system.

To date I have received excellent feedback from clients of Investors Choice who on the settlement of their investment property loan receive a folder containing a simple system to keep everything in one place. Thankyou all for your feedback (you know who you are) and I am sure those of you who make use of it this year will find tax time a little less taxing.